Temasek may close deal with Ranjan Pai for Manipal Health within 4 weeks

Temasek Holdings may soon sign a deal with billionaire entrepreneur Ranjan Pai to buy a big chunk of his holding in Manipal Health Enterprises (MHE) to take a majority stake in the hospital chain, people aware of the negotiations told ET.
The transaction will consummate only after a nod from the Competition Commission of India (CCI), they said.

Pai currently holds a 51% stake in MHE, followed by 20% by PE fund TPG Group, 18% by Temasek, 10% by National Investment and Infrastructure Fund (NIIF) and 1% by employees.

Temasek, Singapore government’s investment arm, has been in talks with Pai, TPG and NIIF to acquire their stakes in part or in full, people cited above said.

While NIIF may exit completely, TPG is looking at part exit while retaining half its stake, they said.

Email queries to Pai, Temasek, and NIIF did not elicit a response as of press time Thursday, while TPG declined to comment.

MHE chief executive Dilip Jose, while declining to comment about the ongoing talks, however, told ET that his hospital chain is pursuing opportunities to expand into Kerala.

The Bengaluru-headquartered MHE is reported to be in talks to acquire KIMS Health hospital chain in Kerala.

PE firm True North holds about 61% stake in KIMS and is planning to exit its investment, people aware of the development said.

Acquiring the four KIMS hospitals in Kerala will add about 1,200 beds to MHE that already operates India’s second largest hospitals chain with 7,800 plus beds across 28 units in 15 cities.

The chain has also been keenly pursuing its plans to acquire AMRI Hospitals in Kolkata from the FMCG player Emami Group to expand into the East. AMRI has three hospitals in Kolkata and one in Bhubaneshwar. MHE is expected to pay about Rs 2,200 crore for a 90% stake in the chain.

The acquisition will add about 1,300 beds to the Manipal chain, sources said, while adding that Emami will continue to hold about 10% stake post the buyout.

Manipal Health is also building three greenfield units – two in Bengaluru and one in Raipur. It operates 10 hospitals in Bengaluru. While the two new ones in the city will go on stream in 14 months, the one in Raipur will come up in two years. They will together add up 850 beds, CEO Jose said.

The brisk pace of acquisitions may help Manipal close the gap with India’s largest hospital chain Apollo, which has about 12,000 beds at 72 locations.

The unlisted Manipal is expected to end 2022-23 with about Rs 4,700 crore in revenue and about Rs 600 crore in net profits, people cited above said.

Temasek has stakes in ride-hailing company Ola, eyewear retailer Lenskart and edutech firm upGrad, among others.